Market Review
​The stock markets around the world showed a recovery last week and were able to gain around 10%. So far, this is just a drop in the bucket after the markets had previously slumped by around 30%.
After all, the first panic has subsided, which can also be seen in the decline of the fear barometer, the volatility. In Germany this is the VDAX index, in the USA it is the VIX. Both came back during the week, but to a modest extent. With values ​​of over 60, both "fear" indices are still at historically high levels, which investors haven't seen since the 2008 financial crisis.

Market Preview
How does it go from here? The camps are divided in the media. While some continue to expect a crisis that has the potential to outshine even the 1930s Great Depression, others believe in central bank support and rescue packages from various governments.
Looking into history, further losses can be expected if we were to face a recession. In the majority of such historic recessions, losses did not come to stop at 25-30%. Instead, they reached levels of 50% to even 90% in the Great Depression. A recession seems inevitable to me, the only question is how much damage can be prevented by monetary and fiscal policy. However, as long as the economic cycles are interrupted due to the corona virus, these measures can only partially cushion economic damage. Or would you go out to eat in the restaurant surrounded by man people just because the government pays the bill?
The further market development depends heavily on the development of the corona virus.

Corona Virus Review and Preview
The number of new infections continues to grow exponentially, despite the lockdowns initiated to date. However, it was clear that these measures would not take effect immediately, but with a certain delay. Since the incubation period of the corona virus is about one to two weeks, we should see a decrease in new infections over the next one to two weeks. Until then, the pressure on the health system and the people working there will continue to increase. The human drama, which after Italy has hit the metropolis of New York with great force and we can only hope that the situation will calm down soon.
It is unfortunate that our species only reacts when the water is up to its neck. We actually wait until the water makes breathing difficult. A consistent containment policy, which experts had recommended weeks ago, might have put us in a position that would allow us to return to a little bit of normality today. Instead, one has to ask how long this situation will continue. Fearfully expected weeks have already turned into months.
In my opinion, it would be necessary to maintain the foreclosure for a few more months. I share the view of the experts that even if we manage to flatten the curve of new infections, we should not immediately return to normal. Shortly thereafter, this would probably result in a second wave of diseases that would exceed the speed of the first wave. However, due to the political pressure from the economy I assume that this is exactly what will happen. The only hope is to find a therapy with which the disease can be treated more effectively or in the early development of a tested vaccine. These scenarios appear to be possible at best by the end of this year, probably not until 2021.

Risk Model Crash Protection
The Crash Protection risk model continues to show a red status for all regions and almost all countries. Security and capital preservation are top priorities. A return to green status requires a strong 20% ​​recovery in equity markets.

Corona Virus Review and Preview
The number of new infections is increasing with high speed throughout the world. Asian countries seem to be more experienced in handling such crises for different reasons. China could keep the number of new infections at approximately 82'000 while South Korea could keep it around 8'000 to 9'000. In both countries the daily growth rates are kept at 1% or below. Singapore und Japan could not containt the number of infections yet, but at least they both can keep the daily growth rates at levels of 10% or below. That was it with the positive news.
Europe shows a completely different picture. The situation there is worrying. In the beginning of the pandemic the governments hesitated to contain full regions like it was done in China, now they have to contain all the country and to push the "pause"-button. The global progression, which Asia was able to avoid, accelerated dramatically once the virus reached Europe. The scope of the human tragedy is brought on stage for everyone in Northern Italy. I do not get tired to emphasize, that the only difference of Italy to other European and American countries is only the fact, that it is ahead of us for some days. The shortage of ventilators will also lead physicians in this country to make life-or-death decisions and to leave people untreated to their fate. The worst is still ahead of us. The unevitable drama comes closer oppressively and wille hopefully pass its sad peak. I wish everyone to come out of this tragedy healthy. Many won't survive. Also depressing is the thought, that his wave might only be the first one of more to come as it was the case with the Spanish Flu almost 100 years before.
A glimmer of hope might be, that most politicians throughout the world are aware of the scope of this tragedy now. An even stronger focus on the development of vaccinations and therapies, additional production of ventilators of social responsible companies like General Motors and Tesla give me hope, that the number of deaths could be kept lower thanks to common efforts.
This period will make history as a human tragedy, which reached its avoidable extent because of the ignorance, missing farsightedness and mislead interests of many politicians in charge. I hope, that future generation will learn from this crisis and that next time there will be people in charge who act more bravely and efficiently than today. The next virus might be even more dangerous than the corona virus.

Market Review
After heavy losses in the last weeks, the latest week showed a bit less panic. Neverthelss most market throught Europe and Asia lost between -3% and -10% week-on-week. Noteworthy are the higher losses of smaller and midsized companies compared to the large corporations. In UK, the FTSE 250 of midsized companies lost -14% compared to 5% of his big brother FTSE 100. This shows, that in the months to come especially smaller companies are threatened in their existence rather than the big ones.
In US the picture is a bit different. After US was hit fully by the corona virus pandemic last week, the markets sold off dramtaically. The S&P 500 lost -14%, the Dow Jones Industrial -17%. New York decreed 100% Home Office for it citizens. California, New York, Illinois und Connecticut told its citizens to stay home.

Market Preview
The next weeks could calm the markets a bit, after the scope of the crises became more conscious to its participants. No one knows though, how bad it will get. A sudden discovery of an effective therapy or a vaccine could turn the markets upwards as quickly as they came down, but this scenario is not very likely in the days and weeks to come. How much damage will the economy take during the period of lockdown, that is the decisive question.
Based on my own historical analysis, market corrections of -25% to -30% are likely to lead to more such losses if a recession is on its way. The upcoming recessions seems unevitable. Therefore, further losses should be expected. After the panic of the last weeks, the losses ahead can be less volatile and less severe in terms of pace and intensity. The increasing number of new infections, based on its exponential growth, might fire up the panic in short term.

Risk Model Crash Protection
The Crash Protection risk model shows a confirmed red status for all regions and almost countries. Actually cash is king, keep your wealth some and protect your capital. A return to a green status requires a strong recovery of the equity markets which does not look very likely at this moment.

Market Review
The last week will make it into the hall of fame of financial history as one of the worst weeks on record. The first heavy drawdown started in the night from Sunday to Monday and led to worldwide losses of around 8%. After two calmer days this loss was overtaken on Thursday. Markets around the globe lost more than 10%. 
The events of the last weeks not only became historic, they even set new standards. Never before, the S&P 500 dropped 25% from a previous all-time high in such a short time. It took only 18 days. This event put the Wall Street panic of 1929 on second place. Not only that, it did so also with a big margin. In 1929 such a drawdown needed 39 days. I underline this, the Wall Street panic of 1929 is second placed. On a weekly basis most equity markets dropped by 10% to even more than 20%. Europe is among the worst performers, since it is heavily impacted by the coronavirus pandemic. WHO even declared Europe as the new epicenter of the coronavirus.

Coronavirus
The coronavirus pandemic has not only the potential to grow into a severe economic crisis of unforeseen scale, but also into a humanitarian crisis like the Spanish Flu of 1918-1920. Small side note, despite its name most scientists believe that the "Spanish Flu" had its origins in the USA. Currently, the rapidly growing number of infections in Europe as well as the even increasing growth rates could make the local health systems collapse. Thousands of people might be left to fate because of the shortage of medical personal and equipment. Europe has to put every effort to lower the growth rates. Hopefully the warmer spring and summer months bring some relief. A turning point would be reached if the growth rates come back quickly as it is currently the case in South Korea. Based on the current numbers, this situation has not been reached yet outside of Asia.

Risk Model Crash Protection
In the meantime, the Crash Protection risk models show a red status throughout all regions (Europe, Asia, America). The global status is neutral at the moment, and it is very likely that it will turn to red within the next days too. Historically, the biggest market drawdowns (with losses of -40% to even -90%) occured during periods of large economic crises. The slowdown of the global economic cycle leads to fear that such a crisis lies ahead of us. Actually, caution must be recommended. Now, capital protection is more important than gaining short-term profits. Because of the high market volatility, portfolio rebalancing should be spread over several days.



Important Note
Generally it is not recommendable to sell into a panic. The large losses caused by equity markets have evolved historically over several weeks or even months (see this analysis). Therefore it is not that important to avoid the next 10% losses of markets rather than the 50-60% which follow thereafter.
Rather than acting impulsive during a period of panic, a crisis strategy should be planned beforehand and executed systematically when the crisis takes place. Impulsive trading is very likely to cause losses.